If you are a long term investor, you tend to always make returns in equities. In fact, equity shares have known to outperform other asset classes in the long term. We have selected a few stocks that offer great opportunities for long term investors. These include stocks that have a very low debt to equity ratio and which have shown good growth over the years. These stocks have the tremendous potential to generate money in the long term. We are recommending one housing finance company, as we believe that the NBFC worries are now behind us.
Here are a few stocks that are from sectors such as NBFC and PET films.
UFO Moviez India Ltd came up with an IPO at a price of Rs 615 and is today trading at Rs 150. At these levels the dividend yield itself becomes extremely attractive.
UFO Moviez is India's largest digital cinema distribution company and in-cinema advertising platform in terms of number of screens.
The company also operates India's largest satellite-based, digital cinema distribution network using its UFO-M4 platform, as well as India's largest D-Cinema network. As on June 30, 2019, UFO's global network, along with subsidiaries and associates, spans 5,646 screens worldwide, including 5,244 screens across India and 402 screens across the Middle East, Israel, Mexico and the USA
Foreign Portfolio Investors and Foreign Venture Capitalists together own nearly 21 per cent of the shares as on June 30, 2019.
UFO Moviez: Solid On Financials
The company in FY 2019 reported an EPS of Rs 23.47, which means based on the trailing EPS the shares are traded at just Rs 6-7 times. The return on capital employed for 2019 was also a healthy 16.74 per cent.
Advertisement revenues at the company has grown from Rs 99.9 crores in FY 2014 to Rs 237.2 crores in FY 2019.
Most importantly in the next few years the company will generate high turnover, with low capex, given that most of the capex strain is now behind. UFO Moviez is likely to continue to do well in the coming years and investors can buy the stock for long term gains.
The shares are available at Rs 149, as compared to the IPO price of Rs 615-625.
TV Today Network
TV Today Network is among the top media houses in the country. It runs popular news channels like Aaj Tak, Tez and India Today, apart from interests in radio and digital.
Recently, the company wanted to sell its radio business, however, it did not get the nod from the requisite authorities. The digital business has been growing at a brisk pace, though the radio business needs to improve significantly.
For the quarter ending March 2019, TV Today Network's numbers were not too encouraging. The company was largely hit on account of new tariff order.
However, going ahead we expect a vastly improved performance as the company looks to consolidate its position.
TV Today Network: Stock near 52 week lows
The company's share prices has dipped substantially from levels of Rs 489, to the current levels of Rs 272. The stock is just 5 per cent above its 52-week low of Rs 258. At the current price the downward risk to the stock is minimal, given the already huge fall.
In fact, the company can report an EPS of Rs 22 by 2019-20, which makes the stock available at a p/e of just 13 times. It is also important to remember that media stocks receive a good discounting on the bourses and hence if we apply a discounting of 18 to 20 times, the stock has the potential to generate 40 per cent returns in 2-years time.
One can buy this stock from a long-term perspective.
IndiaBulls Housing Finance
This stock has dived from levels of Rs 1,400 to the current levels of Rs 425. At the current market price the stock gives a cool dividend yield of decent 7.6 per cent.
For the quarter ending March 31, 2019, the company reported a 6.9 per cent year-on-year (YoY) drop in net profit at Rs 1001 crore.
The company continues to believe that it will deliver strong growth in the coming quarters. In fact, the management is confident that it would achieve a growth of 17-19 per cent in the coming quarters.
The Gross NPAs of the company was also low for the quarter ending March 31, 2019. Recently, the housing finance company also has declared a merger with Lakshmi Vilas Bank. The share swap ratio of 0.14:1, or 14 shares of India Bulls Housing for every 100 shares of LVB has been agreed upon by the respective boards of directors.
However, this is subject to approval from the Reserve Bank of India.
Indiabulls Housing Finance: Cheap on the valuations front
Valuations of IndiaBulls Housing is not very expensive. In fact, by 2020-21, the company should be in a position to report an EPS of Rs 90. This means the shares are trading at a p/e of just 5.5 times one year forward earnings.
This is exceedingly cheap. The price to book of the company is at 1.90 times. The dividend yield of 5.25 per cent also makes the stock attractive. In fact, the company declares a dividend four times each year.
IndiaBulls Housing Finance is a good stock to own and we believe that the stock should double investors wealth in the coming years.
Polyplex Corporation is the sixth biggest player in the globe in terms of PET film. The company has its manufacturing and distribution presence in very important regional markets (India, Thailand, Turkey, USA and Indonesia).
It also has warehouses in Netherlands, Poland, Spain, Germany, Mexico and Italy and liaison offices in Singapore, Malaysia, Korea and Japan.
The company is implementing key projects including a greenfield - BOPET in Indonesia and a brownfield BOPP plant in Indonesia.
The company has a track record of declaring solid dividends year-on-year and in FY 2019, declared a dividend of Rs 51 per share, taking the dividend yield in excess of Rs 51 per share.
The stock is available at a p/e of just 10 times, one year forward earnings and could be a good pick for dividend yields.
Best small cap stocks to buy
In the past some small cap and mid cap stocks have given excellent returns. In fact, small cap stocks have beaten returns from large cap stocks, which have made them excellent bets for the long and short term. Please click on the link to see some excellent small cap stocks ideas.
The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article. The author owns shares in Jammu and Kashmir Bank.